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Ordinance Amendment No. 2022-01 - Commercial Cannabis Regulatory and Tax <br />Updates <br />May 3, 2022 <br />Page 13 <br />2 <br />5 <br />0 <br />8 <br />There is a projected fiscal impact associated with approval of the recommended actions <br />as they will reduce the projected commercial cannabis revenues for cultivation, <br />distribution, and manufacturing already incorporated within the City’s 2022-23 budget by <br />between approximately $730,000 and $920,000. However, other elements of the staff <br />recommendations contained within this Staff Report relating to shared manufacturing, <br />microbusinesses, notably consumption lounges and temporary events, and allowing all <br />retailers to sell both medicinal and adult-use cannabis, will likely provide some degree of <br />offsetting revenues. Staff, however, lacks reasonable data on which to make reliable <br />revenue projections. Likewise, the addition of five (5) potential added retail sales <br />locations, while encouraging in terms of future revenue, cannot as yet be counted as a <br />reliable projected revenue for the approaching 2022-23 fiscal year due to the lead times <br />involved in bringing such locations into operation. <br />Failure to adopt the above recommended action items, however, would have a negative <br />impact on a significant number of established cannabis businesses as well as pending <br />commercial cannabis applicants awaiting adoption of those recommended items before <br />committing to entering the approval, permitting, and licensing process and who will defer <br />or cancel their decision to enter the Santa Ana market, thus causing the hoped for <br />revenues to not be realized. <br />EXHIBIT(S) <br />1. Ordinance <br />2. Resolution modifying various commercial cannabis tax rates <br />3. Resolution establishing a map of commercial cannabis eligible areas in the City <br />4. Recommended Commercial Cannabis Tax Rate Adjustments table <br />Submitted By: Minh Thai, Executive Director of Planning and Building Agency and <br />Kathryn Downs, Executive Director of Finance and Management Services Agency <br />Approved By: Kristine Ridge, City Manager